|
After the ban, the market value of New York-listed Sea dropped
by $16 billion in a single day, leading some investors to cut
holdings in the Singapore-headquartered company.
Shopee said in a statement its withdrawal came "in view of
global market uncertainties" and that the company would make
"the process as smooth as possible".
Sea earlier this month said revenue growth of its e-commerce
business was expected to halve to around 76% this year from a
blistering 157% in 2021, amid fewer online purchases and
engagements as more countries emerge from the pandemic.
"Due to a drastic shift in the market sentiment towards growth
stocks, all these e-commerce companies are under real pressure
to at least break even as soon as possible," said LightStream
Research equity analyst Oshadhi Kumarasiri, who publishes on the
Smartkarma platform.
Sea's shares had already dropped 11% in January after Chinese
tech giant Tencent announced it was selling 14.5 million shares
in the group.
Reuters was the first to report the company's decision on its
Indian operations.
Shopee's India business began in October 2021 as part of an
aggressive international push that saw it expand into Europe.
Sea's market cap at the time was as much as $200 billion. It has
since dropped to $64.76 billion in March 2022.
The local unit, Shopee India, recruited local sellers and
launched a shopping website and app. India's fast-growing
e-commerce market was already dominated by such players as
Amazon.com Inc and Walmart’s Flipkart.
One person with direct knowledge of the company's thinking said
Shopee's decision to exit from India was sparked in part by
stricter regulatory scrutiny that saw Sea's gaming app Free Fire
banned as part of a crackdown on companies allegedly sending
data to servers in China.
Sea said earlier in March it does not transfer or store data of
Indian users in China.
The person said Shopee had been planning to invest up to $1
billion in India, and that the pullback would hurt Indian
logistics firms with whom it had signed lucrative contracts.
The company did not respond immediately to requests for comment.
Reuters reported in February, citing sources, that Singapore
authorities had raised concerns to India over the ban, asking
why Sea had been targeted.
E-commerce players face a strict regulatory environment in
India. New Delhi has for years imposed restrictions to protect
smaller brick-and-mortar retailers.
Offline retailers in India have often alleged foreign companies
bypass regulations and offer deep discounts that hurt their
business, allegations the companies deny. Shopee had in recent
months faced boycott calls from such traders in India.
Shares were down 5.84% at $116.12 in premarket U.S. trading.
(Reporting by Fanny Potkin and Aditya Kalra, additional
reporting by Anshuman Daga and Miyoung Kim; editing by Bradley
Perrett and Bernadette Baum)
[© 2022 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
